Avenue A Unveils New Division

In an effort to diversify its revenue streams and shed its image as an ad campaign optimization company, online advertising agency Avenue A on Monday took the wraps off a new division, the Avenue A Consulting Group.

The new group aims to leverage the company’s technological and media capabilities, and apply them to helping clients segment their customers, retain their customers, find new potential customers, and calculate customers’ lifetime value. It also serves to give Avenue A a new service offering, in a tough market for online advertising companies. Avenue A in early September warned investors that it wouldn’t meet analysts’ expectations for third quarter earnings, because of a slowdown in the online advertising market.

“The Avenue A Consulting Group is approaching our clients’ customer-understanding challenges differently than traditional consultants,” said Brian McAndrews, president and chief executive officer of Avenue A.

“We concentrate on answering a specific set of strategic questions around the customer lifecycle, which means we offer our clients a more focused, deeper and more actionable set of recommendations and execution options in a shorter time frame.”

Avenue A will use the capabilities of its technology — which include anonymous cookie tracking and the ability to merge that data with a clients’ own customer data — to learn as much as possible about a client’s customers. Where do they go, for example, other than to the client’s Web site? Which customers are most valuable? How often to customers return to a client’s Web site? Once the consulting group gathers this information and analyzes it, the group helps clients use the data to deploy media campaigns using Avenue A’s ad serving technology.

So far, Avenue A clients such as MSN, uBid and drugstore.com have used the service.

“Drugstore.com came to us with a challenge,” said Lee Sherman, director of the Avenue A consulting group. “They wanted to identify the best sites for acquiring qualified customers and driving sales. Utilizing our Web Affinity Analysis product, we identified 110 high-affinity sites, 17 that delivered customers ten times more likely to purchase than low-affinity sites.

“Further, we identified a site genre that delivered 43 percent of sales for only 32 percent of budget. We also developed a list of 1.45 million high-quality prospects. These results far exceeded expectations and drugstore.com was thrilled.”